The chair of WPP has defended the handling of Sir Martin Sorrell’s exit and insisted the world’s largest advertising group was powerless to stop its founder from walking away with share bonuses worth up to £20m.

Roberto Quarta told shareholders at the group’s annual general meeting on Wednesday there was “no basis” to cancel Sorrell’s share awards because the company had no proof of misconduct – despite a series of allegations against the former chief executive.

He said: “The contract ... required Martin to be treated as having retired unless a definition of gross misconduct would be satisfied, which it could not, and on which the board had clear legal advice.”

How WPP's chairman responded to investors' questions

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However, investors registered their discontent as nearly 30% of them refused to support the company’s remuneration report.

While Quarta brushed off a modest vote against his own reappointment, several shareholders criticised incentive plans that allow Sorrell to keep earning even after a departure that took place against a backdrop of lurid allegations.

Sorrell resigned in April, in the wake of a company probe into his conduct and alleged misuse of company funds, which has not been established. However, claims over the background to the probe emerged this week, with claims that he bullied staff and was seen by two employees entering a sex worker’s premises in a London red light district. He strenuously denies the allegations.

The 73-year-old advertising tycoon, who has picked up £200m in pay and bonuses over five years, could still receive a further £20m in awards, leading one investor at the AGM to demand that his replacement is not handed “obscene” levels of remuneration.

Quarta also defended the company’s failure to redraw Sorrell’s contract, signed in 2008, that contained an “at-will” clause allowing him to leave at any time and still pick up a retirement payoff. The contract also did not include a “non-compete” clause, an omission that has cleared the way for Sorrell to set up a new venture, called S4, which some shareholders said they feared would now compete with WPP.

Speaking on the sidelines of the meeting, Quarta said his priority after arriving in 2015 had been to reduce Sorrell’s vast pay package, which reached £70m in 2016.

“The sensitivity I was hearing from shareholders was wanting to address the issue of pay, but at the same time wanting to ensure that Martin did not throw his toys out of the pram, so to speak,” said Quarta.

He said he had hoped to renegotiate the contract but had not got round to raising the matter with Sorrell by the time whistleblowers had triggered an internal conduct investigation, carried out by the US law firm WilmerHale. Quarta added that he was confident that Sorrell, who has said his new venture is a “peanut” compared to WPP, would not seek to compete with the business he built.

“We’re watching to see what Martin will do,” said Quarta. “We are entitled to challenge any individual who may breach his or her confidentiality. Martin I don’t think needs to be reminded of his responsibilities and I’m sure he’ll act appropriately.”

“Martin was a hard-working and hard-driving chief executive. I don’t recognise ... the bullying nature of some of the allegations,” Read said after the meeting.

Quarta is understood to have started an investigation into how information about allegations against Sorrell has leaked into the media.

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WPP shareholders revolt over pay following Sir Martin Sorrell's departure - business live

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Read and Quarta both insisted that the £15.4bn company, which is the subject of break-up speculation, could continue in its current form regardless of Sorrell’s departure. WPP houses several leading advertising agencies including Ogilvy & Mather and JWT as well as the media-buying business GroupM.

“In spite of all the credit one needs to give to Martin [...], no one man is the company,” said Quarta.

“It’s been much publicised that this company without Martin won’t survive but if you look at the history that’s not the case.”

He said the company was moving quickly to find a new boss but was unlikely to appoint anyone before the end of the month.

Read, believed to be leading internal candidate, indicated that company’s next chief executive would have to adopt a more co-operative style.

“Can one man run the company? Nobody can run it like he did,” he said.

Earlier in the meeting, the board fielded a succession of questions from investors, particularly about future pay arrangements.

Quarta said the new chief executive’s bonuses would be capped at eight times basic salary, indicating a total annual package worth a maximum of around £10m, based on current remuneration arrangements.

One investor shouted that this was “too high”, although the last time Sorrell was paid that little was in 2009.